Dr. Michael Aifen, a German composite expert, wrote "How (New Crown Epidemic) Changed the Composite Industry: 2020 Global Composites Status Report and Preliminary Prospects" 　　

Dr. Michael Aifen: CEO of German AMAC, Chairman of the Board of Directors of German AVK, Chairman of the Board of German Composites.

Written content:

The impact of the COVID-19 crisis on the industrial sector

　　 The worldwide Covid-19 pandemic has affected all areas of life and work and all types of population around the world. Due to the new crown epidemic, the industry is changing, and the impact is different in different market segments. Currently, the biggest impact is in the aerospace industry. Boeing and Airbus are and will suffer a reduction in total travel, including government restrictions. In the next 6 or 7 years, the industry will still be unable to achieve the same sales figures as before the crisis. The auto market has also suffered a lot because the production line was stopped for more than 6 weeks in the first half of 2020. In addition, they are often also affected by the transition to more electric mobility, which has caused a lot of shrinkage and led to fewer sales. We expect the overall share of the automotive plastics market to be 20% lower than last year.

　　In contrast, the construction and infrastructure industries are still doing very well and can actually benefit from the effects of this crisis. In the plastics industry, this market segment has so far been even 3.6% higher than last year's figure. The wind energy market is also still strong, especially in Germany, and will remain strong.

From the general composite material industry, only a few figures are given: In terms of materials and technology, the entire thermoplastic composite material market is about 16% lower than last year (the beginning of the year so far). We expect that by the end of 2020, it will be compared with LFT, GMT and Compared with choppedfiber reinforced thermoplastic composites, this market segment will be at a negative 15%. We also expect that the SMC market, which is the largest thermoset market in the world, will decrease by 20%.

In general, we have seen a certain recovery in September-November 2020. This is actually quite good. Of course, there are more uncertainties when Europe recently announced the full implementation of a new blockade. We don’t know if It will end early before mid-January 2021, or will we have more orders in hand. Even during the crisis, I will only cite an example of successful cross-border work. I would like to highlight the current inter-regional projects funded by the European Union, Light Vehicle 2025 and AACOMA, where there are more than 50 company activities available in September Held in Aachen, Germany.

Some growing end applications and economic prospects

　　 Generally speaking, the consensus of other expert groups is that the industry will pick up slightly in 2021 as a transition year. If all goes well, by 2022, we will be able to reach the normal numbers before the epidemic crisis. I will give a few examples, despite the crisis or because of the crisis, these applications are doing very well. People invest in personal, safe and safe travel models. As a result, caravans and RVs, which involve many composite materials (for example: panels, roofs and interiors), have grown by more than 30%.

In the SMC market, the truck construction rate immediately dropped sharply in March. For example, DAF produced 250 trucks a day before the crisis. Today, so far, their output is still down to 150 vehicles per day, but the production line is slowly improving, due to the increase in logistics and transportation, the industry is recovering, and we can expect a rapid recovery here.

Changes and repositioning options in aerospace

The supplier bases of Boeing and Airbus must be restructured and reconsidered. They will focus on other markets such as automobiles, infrastructure or consumer goods, or other regions, such as companies that are more active in Europe or the United States today, will turn to Asia , Especially China, because China needs to connect more than 100 cities with 1 billion people through domestic air transportation, so a large number of small aircraft will be needed in the next few years.

Global Industry Overview

　　From a global perspective, China will be the only country with a positive growth rate in 2020. Since the growth rate in 2019 is 6-7%, they still predict 3.4% for the rest of 2020. The composite exhibition held in Shanghai, China in September 2020 also confirmed this positive trend. Especially in the Chinese market, the supply of glass fiber is becoming more and more tight. As a result, the price of glass fiber has increased by 7% twice, almost 14%, because there is not enough fiber supply in the market, especially for construction applications. The Chinese market is the only area that has improved slightly from last year.

　　 In terms of recovery, Europe is in a leading position, especially Germany, while southern European countries must deal with more serious impacts such as Spain and Italy. They may lose more business to low-cost countries such as North Africa, the Middle East and Asia.

　　 North America is somewhat similar to Europe in model, but the pace of recovery from the current crisis has been slightly delayed. Of course, elections also play a role here, but we expect the entire economy to recover only in 2022.

Germany's market status in 2020

　　 The entire industry will decline sharply in 2020, just as thermoplastic composites fell by 15%, thermoset composites may be a bit more. In general, due to the nature of the business related to the mass production of transportation, electronics, and consumer goods, the more easily recycled thermoplastics industry may recover more quickly.

　　 Now, what has changed in daily business interactions, especially in the sales and business development departments? Due to the new crown epidemic, holding any personal meetings has become very difficult. The focus now must be on establishing good relationships before the crisis and maintaining existing business relationships and projects. In the industry, there is hardly any willingness to change, nor the willingness to take any risks or investments, unless there is a truly significant advantage. Raw material producers are defending their existing customer base. The first and second levels of the channel are unwilling to change.

　　 From the first day of the crisis in early March 2020, the use of online video reference tools for customers, suppliers and even team meetings is not only instant, but also starts from the home office. Disappointingly, some large-scale industrial players, especially multinational raw material suppliers, very quickly moved out of the composite material business and related innovative lightweight material development, and returned to the materials they traditionally used because of the Development requires longer development time.

Preliminary outlook after the new crown epidemic

　　 The use of video conferencing instead of private meetings and working from home will of course continue to reduce the company’s travel and office expenses. Of course, short-term long-distance travel will be much less, as we have done in the past, flying to the United States for a one-day business meeting or two days to China. Personal meetings are definitely still in great demand, but they may be replaced by fewer trade shows. You can meet a lot of people in one place, and it may last longer in this place, or when you are in When traveling overseas, I will stay longer to meet more customers. Therefore, a salesperson will still go to certain customers in the future, but in a more effective and lower cost way, combined with the use of video conferencing systems, and perhaps other media. The days of working from home will continue.

What does this mean for innovation?

　　Innovation channels are of course sufficient and ongoing, but during the Covid-19 crisis, it is difficult to develop, test and implement new products and innovations. We expect that any innovation will lose a year, because our customers are not there, their laboratories have no staff, and people cannot meet to manage the project. Therefore, many innovations will be put on hold for several months until the crisis is brought under control. It is hoped that by the middle of 2021, these innovations will be seen again.

The author: Dr. Michael Aifen

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